Funding Application
As an initial source of funding, we are applying for a start-up grant of $15000 from the government. The first step for approval is to answer the following questions Business Describe the business and what makes it unique *The business is an online marketplace where users can buy and sell products and services from massively multiplayer online games. *This website will be free for users and funded by selling webspace for promotions. *The unique feature of this business is a more ethical and democratic option - a clearer consience for the buyer. It is like fair-trade coffee, or blood-free diamonds. Users get to buy virtual goods and services that they know adhere to certain rules - humane, without spam, and fairer. Industry background *These virtual goods and services come from online multiplayer video games. If one of these games has an in-world economy, some players will be willing to trade real-world money for the currency or services in the game (more information here and here) *Most commonly, people collect in-game currency (known as gold farming) or build high-level characters (known as power leveling) which are bought by wealthy players. *Around 400 000 people globally earn a full-time living in this industry. The global trade in this industry was valued at over $3bn in 2009 and is still growing (more here) Market research Customers *People who buy gold or powerlevelling in MMOs. *Globally there are over 15 million people who play MMOs, and it is estimated that around 30% buy gold and levelling. So our customers number around 5 million people. How do they behave when making purchases? *Buyers generally do a google search for 'best gold' cheap gold, fast gold, top rated gold selling websites. They speak to others and ask in forums which service to use. *The make a decision taking into account cost, but also reliability, safetey, customer service, and speed. Where are your customers to be found? Describe the geographic profile of your target market: *For the moment we are going to focus on the Australian gold farming market. Every Australian person who buys goods or services in MMOs is a potential customer. That is true globally, but our test case and marketing and focus will initially be the Australian market. *But for potential customers, any player of any game with an in-world economy anywhere in the world. This is around 15 million players, and 30% buy gold. What motivates your potential customers to buy? Why would they choose to buy from you instead of purchasing from a competitor? *The motivation to buy gold or leveling in gernal is a desire to play the game but not to spend so much time grinding for gold. *They generally have three kinds of problems with buying gold - it's unfair, it brings spammers, and it's exploitative. *The customers who buy from us want a more guilt-free, safe and nice option. Doesn't want to ruin the game, but still wants to play. *Unfairness and how we deal with it: players complain that farming allows players to buy their way to the top, while some have spent lots of time getting there. We will meet this problem by adopting a policy of not farming on certain servers. We would like to help create a system where some servers are gold farming servers and some are pure. We could accept this and it would be win-win for both buyers of gold and those who don't. It would lower the hate towards farming and the guilt that players feel when they buy. *Spamming and how we deal with it: We would commit to not spam, and the farmers could commit to the same in order to make sales. We would have a reporting and reputation mechanism to allow us to uphold these standards. *Exploitation and how we deal with it: In order to sell at the cheapest price, businesses usually employ very poor people in developing countries. These people typically work long hours, in bad conditions, and for poor pay. Many gold farming operations have been compared to sweatshops. *Additionally, we believe we can still offer a very competitive price because the trade is very free and efficient - a direct connection between player and farmer so intermediaries are reduced. Currently only 40% of profit goes to the farmer. If we increase this to 90 percent, the price of gold can drop. *Their choice to buy from us, is it's a better consience. IT is an option that reduces spamming, unfairness, and exploitation. How will your customers know that your business exists? *Word of mouth through gamers in real life. I also have friends in real-life who play games and are friends with other people who play games. I hope to positivily interact with these people about the project to spread interest. *On the internet in three ways: *in world - we will play these games and talk with players in-game. Not spam but talk. *in forums - gold farming (both the good and the bad) is discussed often and by lots of players in the forums for each game. We will put forward this idea and offer to those players who are looking for a better solution to the problem. *Through our wiki - we are creating a wiki on the subject of improving gold farming. Where lots of people can discuss the project of making gold farming and power leveling better - better for everyone. Competition Who do your potential customers currently do business with? Provide information about prices, strengths of competition businesses and what the competition business could do better: There are many, some of the best are: EpicToon *This MMORPG currency selling company that is only a couple of years old but this company has shown itself to have good prices on gold, fast delivery times and provides good customer service. one of the largest. *Well trusted. Widley reviewed. *Good prices. Good customr service. *We spoke to their customer service representatives and they seem to be native English speakers and do not sound like robots. Delivery speed and customer service are very good. T *heir website is easy to navigate and they provide multiple payment options. *EpicToon also This company sells game currency for 11 games. *Live chat is very fast to respond but this is the only contact method they supply on site, they will supply email contacts within live chat though. *They also have a no spamming policy. They try to go green. They offer their website in three European languages. *Their prices are this: 10 000 gold, 15 US dollars. IGE .com *one of the oldest Wow gold site on the net, having been around since 2001. *They back up their sales with the IGE Guarantee and over 3 million gold deleveries to their credit. *This is one of the most trusted Wow Gold sellers around. Payment is easy as they accept PayPal, credit cards, debit cards and Western Union. They are Verisign secured and are BizRate certified. *Also sell currency used in Age of Conan, EverQuest and many, many more. *They sell 10 000 gold for 20 US dollars. Guy4Game *Guy4Game.com has been in the gold game for a long time and continue to be a leading provider of WoW gold. *They accept credit cards, PayPal, Western Union and certified checks. They also offer wholesale pricing. *Guy4Game offers powerleveling and account sales to round out their all in one stop shopping experience. *They are Verisign certified, BizRate certified and a PayPal world seller. *I have talked to a lot of people that have the same good things to say about them. *This site has very good prices but the main thing that it offers is it's wide range of additional services such as experience, honor, arena, and reputation powerleveling. *A really nice and simple website. Not overcrowded with ads. *6hr delivery guarantee *They sell 10 000 gold for 14 US dollars. Bank of WoW ''' *Bankofwow.com has been a leader in Wow gold sales for quite some time now. *They offer to match and beat any Wow gold store price. *We tested this on seperate occasions and they did indeed match and beat their competitors pricing. *They accept a variety of payment options including Credit cards, Paypal and Western Union. *Customer service is one of their strong points as they offer Live Chat 24/7 and also email support. *Bank Of Wow is a trusted Wow gold seller who has been Paypal certified since 2004, is BizRate Certified and is also a member of Square trade. *BankofWOW.com usually has the best price on WOW gold, they check the price on sites they consider reputable every 30 min's and match their prices against that. *this company does not offer additional services such as powerleveling or honor leveling. If you are looking for the best price I highly recommend BankofWOW. *They are selling 10 000 gold for 11 US dollars *Their website isn't so nice though In general their strengths are: *economies of scale. They have no commitment to studios at all. They can take the cheapest gold from the cheapest seller. They are like the woolies of sydney. *What I am offering then is something like a farmers market - a place where people can go and they might not be thinking about absolutely the cheapest. They might be willing to pay more for certain things. *In our case, ethics, no spamming, and server selection.Explained more below. Our advantage *the gold is guilt free in an ethical sense - it is farmed by people who are given better options than they are currently getting. Better conditions, better pay, and more flexible hours. The gold is sweat shop free. *the gold is farmed by people who promise not to spam in the game. this makes it better for everyone. *the gold farmers listen to players about thier habbits, and try to avoid areas and servers where players really desire not farming. We publish this, so players against gold farming can choose those servers that are reserved, and other players can choose those that aren't. We as a global guild of farmers agree on a list of servers where we will and will not farm. We hope to offer a service where buyers of gold and levelling can do so with a better conscience. There is a gap in the market for a company that can offer a place where buyers can connect to farmers directly and ethicaly. *Farmers get to keep all their earnings, better work conditions, and more freedom to determine their own work hours. *less hate: they can elect which servers not to farm on. These farmers are accountable. Maybe sometimes they will have to break the rules, but we will discuss. At least this farmers listen. they should be less hated than others. Our weaknesses *Ethics. We are constrained in some sense by principles that will prevent us maximizing profit at all costs. This is also an advantage because we will target a different kind of customer. *Small size - we must be a boutique service. We must be the organic healthfood store to the large woolies of the big companies - customers are willing to buy our products because of the values we uphold. Sales How do you intend to obtain sales? *We have three main stakeholders in this project. The gamers who buy gold and leveling services, the farmers who supply these services, and the advertisers who promote their products and services on the site. *We need to attract all three of these to the site to interact with each other and create mutually valuable transactions. Farmers *we are going to do two things. First, start a guild of ethical or better farmers - those who meet a certain criteria - willing to discuss their working conditions, policies on spamming, and willingness to farm only on certain servers. *To guarantee supply, we are going to rent a gold farming studio for 1 year. We will provide ethical or better farming conditions - the tools for farmers to come and farm if they are part of the guild. The cost of supplying this studio is low - in India, perhaps $2500 for property rental and bills for a year, and $6000 for computers. To raise this $8 500 we are going to launch a campaign on Kickstarter. *These could be the basis of membership in the ethical farmers guild. There would still be blackhats who don't obey. We can allow reporting and exile. While exile offers freedom from the rules, there are distinct benefits to participating. Buyers *sales will come through free and open-source classifieds software, similar to gumtree. The aim is to create as few obstacles as possible between the seller and the buyer. Currently we are looking into a free and open-source PHP script called Open Source Classifieds but there are others. *Depending on how the community develops, it may be that a social network style is better. In this case we might use BuddyPress, which is a WordPress derived social network platform, integrated with the MarketPress plugin to offer e-commerce services. More info here and here Advertisers *For the advertisers, initially we will explore the standard adsense or provider model that is used on many sites like Wikia. These ads are general ads not specific to the community. They're not as enjoyable, but they seem to work. We will see how much revenue these generate. *Ideally we would do something more enjoyable for us, as users. Some attempt to make the ads of real interest and benenfit sometimes. As much as possible, a win-win situation for those involved. *This approach will take more work though - either the task of forming relationships with possible good partners, or the use of some open software that resembled Facebook's where users can downvote and upvote certain ads and thereby improve their own experience. How much of your product or service are potential customers likely to buy from you? *Sales can range anywhere from 100 gold to over 10 000 units. This might cost anywhere from 10c to 100 dollars, depending on the price. The price of gold fluctuates widely. We will need to provide some info on this. What pricing will be effective for you and your customers? *We would like to charge no commission on the sale. *For pricing of our ads, we would need to negotiate with partners. How much per space. '''Will your sales be seasonal? *Yes in the sense that gold farming depends on new content in the games. There is more content being released in World of Warcraft this year, so this is a great time to be launching a new farming business. *Gold also depends on supply and demand. Just like other currencies, it fluctuates. Here is some expression of this in May due to a change in Blizzards policy, and Chinese New Year: *Until then, demand for gold should stay about the same. But there will be a large leap when that expansion is released. *The same is true for Guild Wars. When GuildWars II comes out, there will be a big demand for gems/gold. *After some months this will flatten out, but hopefully remain above previous levels due to the expanded world and growth of players. *Then the next patch, expansion or game is released. We hope this will be occuring twice a year. Market testing Have you offered your product or service on a “market testing” basis? *We have written a market testing survey which we have published online through our wiki. We are also sending this to networks of gamers. We are waiting to collect the results. If you have undertaken market testing - what did your first customers buy? (If no market testing has taken place, which products/services do you believe your first customers will buy?) *We offered a choice in the survey between gold farming and power levelling, and which games they might like. Participants will discuss their preferred service and preferred game. *We believe people will buy gold but not power-levelling until our reputation is established. Until someone has reviewed us. Then more power-leveling services. What comments were made about your product or service? *We have received positive comments from face-to-face discussions. List any other information that relates to market testing for your product or service: *The 'feel-good' gap in this industry has been demonstrated by the World Bank, and a report by Richard Heeks at the University of Manchester. There is a huge space in this industry for a comany that was offering 'gold' or virtual work that was ethical and gave buyers a better conscience. *The 'spamming' gap in this industry has been demonstrated in multiple articles and forums about the gold farming industry. Many players feel it ruins the game. By making farmers autonomous, this allows buyers to report them directly to us, and us to form a guild of farmers who comit to no spamming. How will you fund the business? (e.g., personal funds, bank loan, family loan) *Through this grant and a kickstarter campaign. Conclusion Although there are still many things to work out, we are cautiously optimistic about this project. The task is to identify the problems and develop solutions.